How Higher Education Could Save Medicaid

Three states have experimented with bringing public universities on as full partners in administering the low-income insurance program.

As states undertake the gigantic tasks of reforming their Medicaid systems to be more fiscally sustainable and preparing for a significant enrollment expansion under the Affordable Care Act (ACA), an unlikely partner could be emerging to help them shoulder the immense administrative burden of doing so: the public university system.

The idea of public universities working with state agencies isn’t necessarily new, but three states (Maryland, Massachusetts and Ohio) have taken the extra step and made their higher education institutions full-pledged partners in administering the Medicaid program. What do they do? The schools research policymaking decisions, conduct evaluations of new initiatives and prepare the next workforce that will serve Medicaid patients in the future.

Officials in those states say the partnership has been a big win for both sides. And given the challenges facing state Medicaid agencies in the coming years, it’s one that more states should be considering.

“Serving public agencies and the public population is part of our mission and this is a way of fulfilling that,” says David Polakoff, chief medical officer for Commonwealth Medicine, the health-care consulting arm of the UMass Medical School, and former chief medical officer for MassHealth, the state’s Medicaid office.

States often rely on individual contractors to perform some of these functions. And higher education institutions are sometimes brought in to serve specific roles, like conducting an analysis of a new program. But the advantage of bringing in colleges and universities as full-time partners, rather than one-off contractors, is that those relationships become more ingrained and more efficient. You aren’t starting from scratch when asking a school’s faculty to analyze an initiative or undertake a workforce training effort, Polakoff says.

“If you take a more organized approach, then it allows you to build the contractual vehicles that allow optimal use of the resources,” he says. “If you pull things together under umbrella in organized way, then you pull academic resources in a more comprehensive way.”

There is also a financial incentive. States typically pay 50 percent of costs for any Medicaid administration, and the federal government covers the rest. If states utilize public schools to perform some of those administrative tasks—schools are already funded independently by the state—there are fewer additional costs and the state saves money.

So this all sounds good in theory, but what does it actually look like? Masschusetts, Maryland and Ohio provide some examples.

Back in 1994, the Maryland Medicaid Office and the University of Maryland-Baltimore County partnered to create the Hilltop Institute, and the institute has since become one of the primary Medicaid policymaking labs for the state. It initially provided case management services for high-risk beneficiaries with high costs, but has grown into a central policymaking unit. The institute is responsible for all financial modeling, helped the state develop its managed care program and works with an actuarial firm to set the capitated rates that health-care providers receive to participate in that program. The institute also houses all of Maryland’s Medicaid data. Since 2010, Hilltop has also conducted the official analysis of the Affordable Care Act’s impact on Maryland, which has been a guiding force for the state’s Health Care Reform Coordinating Council.

In Massachusetts, the UMass Medical School has worked extensively on the delivery side, helping providers in the state pilot a new patient-center medical home model since the state passed its health reform law in 2006. Coaches from the school routinely visit pilot homes, advising the staff and collecting data for evaluation. As the data flows in, the school has been responsible for evaluating the quality of the pilot program and targeting areas for improvement.

And in Ohio, the state’s public medical schools have combined to create the Government Resource Center, which has effectively become the research arm of the state Medicaid office. The center has its own staff, but also draws on the expertise of faculty from the state’s seven public medical schools and 13 public universities. Ohio has also undertaken an initiative to train a new generation of health-care providers who are fluent in the latest innovative care models and committed to serving the state’s Medicaid population. The state Medicaid office has set aside $10 million to fund efforts by six public universities to train 1,000 practitioners in the next few years.

These partnerships aren’t without their challenges, says Abigail Averbach, chief of staff at UMass’s Commonwealth Medicine and a former state health official. But because there is frequent staff transition between the government and academic world, partners on both sides are more aware of what the other side is dealing with.

“The university doesn't have all the brains. They sit in the public agency as well. Sometimes, the academic side can be lofty and feel they have all the answers, the perfect methods and perfect approaches, and they have trouble respecting day-to-day circumstances of state agencies,” she says. “So it’s part of university job to understand the day-to-day workings of state Medicaid agency. That works better when you have people on the university side who have worked as the state side.”

Some might also scoff at the melding of two public bureaucracies. But partnering with universities doesn’t mean Medicaid offices have to ignore the promise of the private sector, says Jerry Friedman, associate vice president in the Office of Health Sciences at the Ohio State University Wexner Medical Center, and former chief of Ohio's Medicaid Policy Bureau. Instead, universities just add more competition to the consulting field, he says, though some do believe that, because of their nature, universities are simply better equipped to handle the needs of a public agency. “

Nobody has got a gun to their head. If we're not delivering value, they'll walk away. There’s no compulsion on their part. It’s very much a competitive environment, but it’s not outsourcing—it’s insourcing,” Friedman says. “The value is you begin to create an institutional memory, a body of knowledge, that you are able to utilize that on an everyday basis.”

For more details on the vision of university-Medicaid partnership, read the UMass Medical School white paper below.